The government on Tuesday has proposed to reduce the basic custom duty (BCD) on mobile phones, mobile printed circuit board assembly (PCBA) of cellular mobile phones, and mobile chargers to 15 per cent from 20 per cent earlier, in the interest of consumers.

“With a three-fold increase in domestic production and almost 100-fold jump in exports of mobile phones over the last six years, the Indian mobile phone industry has matured,” the Finance Minister said in the Budget.

According to Muralikrishnan B, President at Xiaomi India, the announcement to reduce BCD on mobile phones, PCBA, and chargers, will help further strengthen the domestic electronics manufacturing ecosystem. Simultaneously, it has also extended exemptions on inputs and raw materials for smartphone manufacturing, capital goods, and inputs for capital goods in the electronics industry. “The proposal for a comprehensive review of the tariff rate structure is another positive step that will further strengthen the industry,” he added.

Meanwhile, for telecommunication equipment, the government has also proposed to increase the BCD from 10 per cent to 15 per cent on PCBA of specified telecom equipment, to incentivise domestic manufacturing, which some industrialists also think was a good step. “As a country, we import PCBA assemblies across various electronics sectors worth almost $6 billion. This is despite having enough capacity in the country. So this step is in the right direction. The Finance Minister has also promised to review the customs duty structure. We are hopeful these steps will provide a big boost to the EMS companies that are assembling PCBAs in the country,” According to Sunil Vachani, President, Consumer Electronics and Appliances Manufacturers Association (CEAMA) and Executive Chairman, Dixon Technologies, told businessline.

However,SP Kochhar, Director General at Cellular Operators Association of India (COAI) said this will increase the cost of providing services as the telcos are continuously upgrading their networks with the advent of the new technology.

“COAI has previously requested exemptions on customs duties for certain telecom equipment to alleviate the cost challenges associated with deploying this critical infrastructure. Over the past five to six years, the government has gradually increased the customs duty on telecom equipment to 20 per cent, posing a substantial financial burden and significantly impacting the rollout of 5G services in India,” he added.

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